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Introduction to Economics
Scarcity and Choice: Resources are limited and require choices to be made about how to allocate them amongst competing needs and wants.
Supply and Demand: The interaction between supply (availability of goods/services) and demand (consumer preferences) determines prices and quantities in markets.
Opportunity Cost: Every choice involves giving up the next best alternative, emphasizing the trade-offs needed in decision-making.
Key Economic Concepts
key econ.pptxThe Effect of Economic Concepts on the Economy
Inflation
High inflation can erode purchasing power, affecting consumer spending and investment decisions.
Deflation
Deflation may lead to reduced business investments due to expectations of lower prices.
Unemployment
High unemployment can dampen consumer confidence and spending, impacting economic growth.
GDP
GDP growth or contraction can indicate the overall health of the economy, influencing investor sentiment.
Supply and Demand
Supply and demand imbalances can drive changes in prices and influence market dynamics.
Economic Fundamentals Case Study
Significance of Economic Trends
Positive trends in some of these key indicators may suggest a growing economy with positive investment opportunities.
Negative trends might signal economic challenges, impacting job security, investment returns, and financial planning.
Understanding trends helps individuals make informed decisions about saving, spending and investing.
Economic trends can guide asset allocation strategies and risk management for investors.
Further Learning: Impact of Economic Trends on Personal Finance
Central Banks and Government Policies' Impact on the Economy
Central banks regulate monetary policy, controlling interest rates and money supply to influence borrowing, spending, and inflation.
Government fiscal policies target taxation and government spending, which impacts consumer demand and overall economic activity.
Central banks and governments collaborate to stabilize the economy during downturns and promote growth during upswings.
Changes in policies can influence interest rates, credit availability, and investor behavior along with the value of markets and asset prices.
Additional Resources
Article on Monetary Policy (Click on the Image)
Paper on Central Banks (Click on the Image)
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